Deal of the Month: TrueEarnings Card from Costco and American Express
December 7, 2012
By: Joe Taylor Jr.
The TrueEarnings Card from Costco and American Express doubles as your membership card when you shop at any of over 600 warehouse club locations throughout the United States. The companies' partnership means you can't use any other kind of credit card in Costco's checkout lanes, meaning you can't bring a Chase Sapphire or a Capital One Cash card on your warehouse club expeditions.
If you're not already familiar with Costco, the warehouse membership club operates on a different business model than typical retailers. Each year, members pay Costco a fee of up to $110. According to reports on CNBC and elsewhere, Costco earns the bulk of its profits from those memberships, then applies just a nominal markup on its selection of food, fuel, office supplies, and other merchandise. If you're a Costco member who's already paying an annual fee on another cash back credit card, you may immediately save money by switching to this no annual fee account.
You'll see some of Costco's biggest membership benefits at the gas pump. Members have reported differences of up to 30 cents per gallon between Costco's posted prices and those of neighboring filling stations. However, Costco and American Express recognize that you're not always going to be near a warehouse club when you need gas. That's why the TrueEarnings card offers a 3 percent cash back on gasoline at U.S. stand-alone gas stations, including at Costco, for purchases up to $4,000 per year. After you hit that spending cap, you'll still earn the same 1 percent cash back on gas as you will on your other purchases.
The TrueEarnings card also offers 2 percent cash back on dining out at U.S. restaurants, placing it in the same league as other American Express cash back cards. Casual travelers will also enjoy 2 percent cash back on eligible travel purchases, including at Costco, such as airfare, hotel rooms, and car rentals. Cardholders can stretch their savings even further by booking tours and vacation packages through Costco, while American Express' dedicated travel concierges can help with low prices on routine itineraries. And receive 1 percent cash back on other purchases, including at Costco. Cash back is earned only on eligible purchases. Spend cap and other restrictions apply.
While other cash back credit cards allow you to redeem your rewards more quickly, you can compound your savings by waiting for your annual Costco reward coupon. Even though a friendly Costco member services representative will convert your reward coupon into cash on request, it's hard to resist the temptation to trade your rewards for any of the warehouse club's premium items, like watches, furniture, or even wedding items. Funnel your household expenses through the TrueEarnings Card from Costco and American Express card, and you might even earn enough to cover next year's holiday shopping list.